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Connecticut Resists AT&T's Web TV Bid
by Michael Martinez
Connecticut's top law enforcer wants to keep AT&T from receiving a license to provide its new Internet-based television service in the Nutmeg State.
Earlier this year, Gov. Jodi Rell signed into law a measure that eases the entry for video service providers into competitive markets. The law took effect Monday, but State Attorney General Richard Blumenthal called on state regulators to reject AT&T's application because he said he believes the company should have to obtain a cable franchise.
AT&T told state regulators last year that its Internet-based service should not be subject to cable rules because it is a data service. The state Office of Consumer Counsel filed a federal lawsuit after Connecticut's Department of Public Utility Control decided that AT&T's new service should be treated as a data service. A federal judge recently tried to negate the ruling.
But according to AT&T, the ruling was made moot by the state's new telecommunications law. The company has filed a new application for a license for its U-Verse service.
In a statement, Blumenthal accused AT&T of pursuing a more lightly regulated franchise and insisted that the company is only interested in serving the state's wealthiest and most accessible customers. He said the company has abandoned its argument that its Internet-based service is not a cable service so that it can take advantage of a flawed new law.
"Their switch in position is apparently to use this new law in contending that they can be granted a less demanding 'franchise-light,' giving them all the profit but none of the responsibility for serving the public," Blumenthal said.
He also claimed that AT&T has been illegally operating in Connecticut without a franchise for more than a year. The company currently offers its U-verse service in parts of 40 cities and towns and has pledged to invest $336 million in the network.
"We will insist that they meet all federal requirements for a franchise in Connecticut, including a schedule for a full build-out servicing all customers," Blumenthal said. "Competition must benefit all customers and citizens to be meaningful."
AT&T released a statement blasting Blumenthal for "trying to turn back the hands of time" on the state's telecom market. The company claims that the state's new rules have opened it to more competition and that Blumenthal would be denying consumers the benefit of the statute by blocking its application.
In a telephone interview, AT&T spokesman Seth Bloom said Blumenthal is calling for the company to take steps it is already required to do under the new law. He said the company has committed not to "cherry-pick" by offering service only in wealthy areas and to comply with local requests about carrying public educational and government channels on its system.
"There is absolutely no need for him to call for these things," he said. "He has no evidence to support his claim that we will selectively provide service in only certain areas. We're going to continue to build [to] reach communities of all types in Connecticut."
State Prosecutors Defend E-Gambling Ban
Attorneys general from Florida and Maryland this week wrote to the leaders of the U.S. House Financial Services Committee to object to a proposal that would repeal a federal law restricting online gambling.
Florida Attorney General Bill McCollum, a former U.S. House member, and Maryland Attorney General Douglas Gansler told committee Chairman Barney Frank, D-Mass., and ranking Republican Spencer Bachus of Alabama that federal legislation that would allow and regulate online gambling would undermine the authority of states to enforce their own laws.
Last year's law effectively prohibits financial firms from processing payments to unlawful online gambling sites. The Treasury Department and the Federal Reserve Board released a proposed rule for enforcing that law this week.
Frank has introduced a bill, H.R. 2046, that would establish a federal licensing program for online gambling firms to do business with U.S. customers. It would task Treasury with authorizing and regulating the system. Financial Services held a hearing on the measure but has not acted on it.
According to Gansler, it would be dangerous for the federal government to become responsible for issuing gambling licenses. Attorneys general from dozens of states last year supported the passage of the anti-gambling law.
Frank's bill "would throw open the doors of the United States and allow for the greatest expansion of legalized gambling in American history," Gansler said. "This attempt to divest the states of their gambling enforcement power is sweeping and unprecedented."
Report: Aging State IT Workforces Pose Problems
States need to become better prepared for the departure of the large number of information technology employees who soon will be eligible for retirement, according to a new report.
The National Association of State Chief Information Officers found in a survey that states are expecting to lose about 27 percent of their public IT workforces during the next five years. According to the report, most states do no yet have contingency plans to counter the trend.
"These are major leadership challenges and cannot be ignored," the report said. "The survey results clearly indicate that states will face a troubling future unless they take action now to bridge the knowing-doing gap."
NASCIO urged state governments to immediately begin assessing how the departure of key employees will affect the delivery of public services. The report recommended that states begin exploring innovative recruiting strategies to replace employees, seek business opportunities with qualified private partners, and study ways to deliver crucial IT-related services through alternative business models.
The group found that states already moving on the issue have plans that are far from being fully developed. NASCIO said most temporary solutions involve hiring contract employees and outsourcing certain services.
"State CIOs who begin to address this issue, and develop plans for knowledge management and IT employee retention, will be ahead of the curve on a challenge that is quickly coming around the bend," the report said.
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